Xstrata plots coal surge

XSTRATA could raise its coal output by 80 per cent over the next five years to cash in on rising demand, according to a company presentation.

Xstrata, which has taken mining analysts to its new Mangoola coal mine in Australia this week, could push its annual output to 145m metric tonnes by 2016, Nomura said in a note.

The company told analysts on the trip that its coal resource base has risen 80 per cent since 2005, with most of the growth coming from the New South Wales region of Australia. Its expansion is set to come from brownfield sites.

Xstrata said the surge in demand for coal was coming from China, Indonesia, India and Brazil.

Analysts at UBS said in a note that the Mangoola project, which is in its final months of process testing, appears well-constructed with the capacity for expansion.